New Zealand


Policy Performance


Economic Policies

Despite New Zealand’s small size and geographic remoteness, the country scores well (rank 10) in terms of economic policy. Its score on this measure has risen by 0.1 point relative to 2014.

Post-earthquake reconstruction, tourism, immigration and an associated demand for new housing have helped boost growth. Debt levels are stable and moderate by OECD standards, with budget surpluses achieved in recent years.

Unemployment rates have declined over the last year. Australia’s economic slowdown has diminished or even reversed a drain of skilled workers out of New Zealand. Labor-market policies have helped to reduce problematic youth-unemployment rates, but indigenous-community unemployment remains troublesome. Skills shortages in key economic areas are becoming a problem.

Taxes are comparatively low. Tax reductions have been delayed in pursuit of a budget surplus, while a property tax has been imposed to control speculation. R&D policy is a weakness, but private-sector spending is rising.

Social Policies

With high educational attainments and a strong health system, New Zealand falls into the top ranks internationally (rank 6) with regard to social policies. Its score on this measure is unchanged relative to 2014.

While the country’s PISA scores are high, educational performance is declining, and concerns about inequality related to socioeconomic disparities are rising. Indigenous children in particular are struggling. Social-security benefits are comprehensive, but high housing costs are a growing problem for the poor. Child-poverty rates remain high.

Health reforms have consolidated hospitals and primary care facilities, while decentralizing care. Maori health outcomes are improving. The labor-market participation rate among women is comparatively high. Pension policies prevent poverty. Private pension plans are increasingly popular, but have been criticized for a lack of transparency.

Integration policy is largely successful, with a new visa program focusing on skilled immigration. Net immigration figures have risen sharply.

Environmental Policies

With a strongly agricultural economy, New Zealand falls into the lower-middle ranks (rank 27) in terms of environmental policy. Its score on this measure has risen by 0.1 point relative to 2014.

Water management and use and greenhouse-gas emissions have been a focus of policies in recent years. Deforestation has been addressed through an effective permit system. Critics say the government has failed to resist agricultural-industry pressures, particularly with regard to dairy farmers, but all recent governments have been active in protecting biodiversity.

While New Zealand withdrew from its original commitments under the Kyoto protocol, it ratified the Paris climate agreement in late 2016, pledging to reduce emissions to 11% below 1990 levels by 2030. However, the emissions-reduction plan depends on an emissions-trading scheme that excludes the agricultural sector’s significant biological emissions.

A new act implements a system for gathering and systematizing environmental data, and the environmental ministry has been restructured to strengthen its policy capacities.



Quality of Democracy

With fair and transparent electoral policies and a strong rule of law, New Zealand receives a high overall ranking (rank 7) for the quality of its democracy. Its score on this measure has declined by 0.1 point relative to 2014.

Voting policies are open and inclusive, with campaign financing effectively monitored by an independent commission. Voting support for citizens with disabilities has improved, and turnout rates have risen. Citizen referendums exist, but are nonbinding. The media sector is largely controlled by Australian companies, with a proposed merger between two already-dominant figures drawing regulatory pushback.

Civil rights and political liberties are strongly protected. The security services have been made more transparent, even as their scope and power has expanded. Anti-discrimination regulations are broad.

Despite the lack of a written constitution, strong courts and a culture of respect for the law afford legal certainty. Corruption is very rare.



Executive Capacity

With a strong focus on interministerial coordination, New Zealand is rated among the top performers (rank 4) in the area of executive capacity. Its score on this measure has improved by 0.1 point since 2014.

A strong government office engages with ministries in a highly collaborative system, and is responsible for centralized strategic planning. Several new measures aim at improving infrastructure for policy development and consultation. Formal and informal coordination between ministries and with the government office is common.

Impact assessments are mandatory and systematically performed, with a strong quality-assurance component. Societal consultation is robust, although a trend of passing bills under conditions of urgency, precluding public input, has been evident.

Despite minority status, the government has implemented its agenda efficiently, learning from previous minority-government experiences. Ministerial compliance is strong, based on a principle of collective responsibility. A series of reforms has increased central-government control over local governments, prompting strong municipal opposition.

Executive Accountability

With strong audit and ombuds functions, but media and political-party weaknesses, New Zealand scores well overall (rank 12) in the area of executive accountability. Its score on this measure is unchanged relative to 2014.

Parliamentarians have comparatively slim resources, but ample oversight powers. The highly effective ombuds office is the world’s fourth-oldest.

The population’s policy knowledge is generally strong, with children showing an above-average interest in politics. TV and radio broadcasts offer some high-quality information. A decline in investigative journalism in the electronic and print media has been partially offset by Internet commentary.

Decision-making styles in the traditional political parties vary. The small number of well-organized economic associations are involved in lobbying and policy formation. Other civil-society groups are frequently consulted by decision-makers.
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